Chen Jin, Comac’s marketing chief, declined to answer questions about confirmed orders for deliveries that, according to the manufacturer’s schedule, would begin after the C919’s maiden flight in 2014.

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Neither has the aircraft maker announced a price tag for each plane, although based on industry speculation Comac’s current order book could be worth more than $26 billion.

Some in the industry have speculated that the most recent deals were cut for political, not necessarily commercial, reasons.

Fueling this speculation was the weekly newspaper China Business Journal, which recently reported that not a single client has guaranteed an order for future delivery with a cash deposit — a common business practice in the international aviation sector.

“Clients who placed orders for C919s simply showed intentions to buy,” said an aviation leasing sector source. “It’s hard for them to make deposits. And money isn’t a problem for Comac.”

An official at a regional division of the Civil Aviation Administration of China (CAAC), who declined to be named, called the C919 project a government-backed “national initiative.” To support the point, he cited the example of C919 customer Joy Air, a Comac sister company under the state-owned parent Aviation Industry Corp. of China (AVIC).

Joy Air was launched in 2009 expressly to buy and put into service Chinese-built passenger airliners. The company’s November order for 20 C919s would complement an existing fleet of aircraft built by another AVIC subsidiary, Xi’an Aircraft Industry (Group) Co. Ltd.

Early on, the official said, Joy had planned to buy foreign-made airliners from U.S.-based Boeing Co. and Europe’s Airbus SAS. Under pressure from AVIC officials, however, the company switched allegiance to Chinese plane-makers.

Speaking to Caixin, Chen declined to say how the government might influence Comac’s clientele, but he stressed that each client is a large, international company.

A source at a Shanghai-based leasing company said the C919 program fits the Chinese government’s national industrial strategy. Thus, he said, it’s logical that the manufacturer’s biggest supporters so far would be domestic airlines.

Earlier orders for the C919, a jetliner that’s expected to rival the Boeing 737 and Airbus A320 medium-range passenger planes, were placed by most of China’s airlines, as well as U.S.-based GE Capital Aviation Services and financial leasing companies linked to China’s major banks.

Altogether, GE has requested 20 aircraft — 10 in each of two orders, said Xia Zhicheng, president and CEO of GE (China). The company has corporate ties to the manufacturer of jet engines for the C919, and currently manages a worldwide fleet of 1,450 aircraft.

Yet, the project is only about half-done, according to the source, underscoring what some experts say is an accountability gap that flies in the face of Comac’s strong government backing and respectable order book.

A central government or independent organization should be created to oversee the C919 project and keep an eye on Comac’s finances and other aspects of the project, said Zhou Jisheng, a former engineering department chief at Commercial Aircraft Co. Ltd., a state company that preceded Comac.

“National-level supervision and management needs to be made on this project,” said Zhou. “The public hardly knows the real situation” and doesn’t know how Comac is spending its money.

Zhou said the project needs a supervisor as well as an auditor to keep track of the project’s progress. Moreover, oversight would help the company allocate funds efficiently, according to each phase of the project.

Surprising reports about unusual business practices at Comac have trickled into the press, such as the China Business Journal report.

Before a Chinese airline buys a plane, the government says it must report its purchase plan to CAAC officials, who in turn seek approval from the National Development and Reform Commission (NDRC), Caixin learned from Boeing and Airbus officials.

At the same time, the airline is obligated to guarantee an order by paying a certain amount and signing an agreement with the manufacturer.

This money technically becomes a deposit for an order only after the plane-purchase plan has been approved by the NDRC. The deposit amount is kept secret.

Reports that Comac’s project has plenty of funding have been contradicted by specialists such as Feng Peide, deputy director of technology committee of China Aviation Industry Corp. I, another state-owned aircraft manufacturer. In March, Feng said the C919 needed more money — and would get it from the central government.

Feng noted that an Airbus research and development budget for a single, large aircraft is usually more than 20 billion euros ($26.2 billion)
EURUSD, +0.2522%

Comac’s original timetable for the C919 called for first-stage design work to be completed by 2010, and rest of the design to be finished this year. The first airliner is supposed to begin test flights in 2014, and shortly afterward the finished product is expected to hit the market.

A report in the U.S. magazine Aviation Week in November said it seems unlikely that Comac will be ready for a C919 test flight by 2014, citing the project’s half-finished status.

Nevertheless, Comac officials hope to keep the project on schedule. They say, for example, that production has started for the first batch of aircraft components at factories in Chengdu and Shanghai.

“We will try our best to achieve the first test flight in 2014,” company President He Dongfeng said at the Zhuhai air show.

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